Hevesi in Hospital on Day of Sentencing

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Disgraced ex-state Comptroller Alan Hevesi was in a hospital as he faced sentencing for influence-peddling at the state's massive pension fund, his lawyers said.

Updated at 11:35 AM EDT on Tuesday, Mar 29, 2011

Disgraced ex-state Comptroller Alan Hevesi was in a hospital Monday as he faced sentencing for influence-peddling at the state's massive pension fund, his lawyers said.

With Hevesi absent, his judge angrily stepped out of the case amid what he called baseless claims from Hevesi's lawyers that the judge had a conflict of interest.

It's now unclear when Hevesi, a Democrat, will be sentenced for accepting free travel and campaign contributions in exchange for awarding a certain firm hundreds of millions of dollars in pension fund money to manage. Hevesi, 71, has a court date April 4 with a new judge.

Hevesi never made it to court Monday. He was in a Virginia hospital with signs of internal bleeding and was undergoing an endoscopy during the day, lawyer Bradley D. Simon said. It's a procedure in which doctors insert an instrument into the body so they can see internal organs.

Hevesi became ill over the weekend while visiting his daughter in Virginia, Simon said.

Hevesi pleaded guilty in October to a corruption charge. Once the state's chief financial officer, he was the highest-ranking official in a pay-to-play scandal that has brought guilty pleas and civil settlements from a roster of politicians, financiers and firms.

He could face up to four years in prison or no jail time at all.

The decision is up to a judge. Until now, it's been a judge who happens to have close ties to Simon's estranged father.

Simon asked state Supreme Court Justice Lewis Bart Stone to recuse himself. The request came after an uncomfortable March 1 hearing in which Simon said he learned that his parents' wills have disinherited him — and that the judge is the executor of those wills, as well as a trustee of a trust the parents had set up. Simon called that a conflict of interest.

Stone had previously said he didn't see a conflict, saying he and Simon's father had never discussed the discord between father and son.

The judge blasted Simon Monday for raising what he called a "meritless" issue that got media attention, saying his involvement in the parents' financial affairs had long been known to their son.

"The effect of this publicity has been to create a counter-story ... to the real story here" of Hevesi's crime, the judge said. But he said the controversy and ensuing coverage "dims the clarity of this sentencing," so he would transfer the case.

Stone has presided for two years over other cases stemming from the pension fund probe, but Hevesi and then-state Attorney General Andrew Cuomo's office had already reached a plea deal by the time Hevesi's case went to the judge. Cuomo, a Democrat, is now governor.

The office of current Attorney General Eric Schneiderman, also a Democrat, said in court papers there was no reason for the judge to recuse himself from the sentencing.

Schneiderman's office declined to comment on Monday's developments. Hevesi's camp was pleased the judge had taken himself off the case, Simon said.

Hevesi resigned in 2006 after pleading guilty to a felony for using state workers to chauffeur his wife. The pension case emerged after he left office.

He ultimately admitted letting a California venture capitalist pay for the comptroller and his family to take five trips to Israel and one to Italy, at a total cost of about $75,000. The investor, Elliott Broidy, also arranged for $500,000 in campaign contributions directed by Hevesi or his staff. And Broidy paid $380,000 in bogus consulting fees to a friend of Hevesi's chief political adviser, Henry "Hank" Morris.

Around the same time, Hevesi awarded Broidy's company, Markstone Capital Partners, a $250 million pension fund investment. Broidy pleaded guilty to a felony charge of rewarding official misconduct.

Eight people, in all, have pleaded guilty to criminal charges in the case. The only one sentenced so far, Morris, got 16 months to four years in prison; the range reflects the possibility of parole. Morris admitted using his connections to Hevesi and other pension fund officials to extract $19 million in personal payouts from firms hoping to manage some of the money.

At $141 billion, New York's retirement pool is one of the world's largest government pension funds and a rich source of investment dollars.

Several financial players paid more than $170 million in civil penalties in connection with the pension fund investigation. They include such politically connected firms as the Carlyle Group and such prominent financiers as Steven Rattner, who helped lead the Obama administration's bailout and restructuring of Chrysler and General Motors.

Before Hevesi became the state's chief financial officer, he held the same office for New York City and was a longtime state assemblyman in a Queens district now represented by his son, Andrew Hevesi.